[OPINION] Funding Budget in Era of Scarcity-Analysis

Posted by African Examiner Articles/Opinion, Featured, Featured Contributors/Columnists, Latest Headlines Sunday, September 13th, 2020

By Bolade Nafisat

(AFRICAN EXAMINER) – Funding national budget is a tough job especially for decision makers from the Finance Minister, Zainab Shamusuna Ahmed to the Director General of the Budget Office, Benjamin Akabueze. They have the difficult job of attending to needs of several ministries and agencies, with expenditure request often overwhelming available resources.

The rule for decision making is however very clear going by interactions with officials. Priority is to be accorded revenue generating agencies in term of deepening revenue generation capacity, expanding opportunities for revenue generation and blocking loopholes and leakages in revenue collection. A delicate balance is to be maintained between revenue generating and other agencies with mere spending responsibilities.

In the current setting, opening new revenue outlets and deepening existing ones are critical to national survival. Expectedly, the solid mineral sector is attracting attention of the administration, eyeing boosting the sector’s contribution from less than two percent to almost five percent or more.

Assisting the budget decision makers is the mining sector roadmap of the Federal Governmeht, setting out steps required to diversify the economy and enhance its contribution to the GDP. The roadmap is a federally approved policy, the funding of which should naturally attract the blessing of the administration. Of course, there must be prioritisation, creating a phased plan with the most promising sub-sector receiving requisite attention.

Experts within the sector had identified areas of challenges. The Technical Adviser, Mining Strategy & Policy, Mineral Sector Support for Economic Diversification (MINDIVER) in the Federal Ministry of Mines and Steel Development, Amanda-Lumun Feese, was recently quoted as listing the following : the “lack of transparency in revenue collection and weak accountability of resource revenue use; risk of Dutch disease (real exchange rate appreciation and inequitable inter-sectoral development); disproportionately revenue spending on current consumption compromising inter-generational equity; lack of long-term development plan that guides the allocation and use of resource revenues, inequitable distribution of mineral revenue and neglect of local authorities and communities living near mining areas.

Others are “Lack of credible processes and institutions to ensure accounting and auditing of revenue and payments; weak implementation and enforcement of the mining law and regulations; weak revenue collection and assessment systems; no proper mechanism for coordination with other FGN MDAs – environment, finance, power, transport, works and housing, trade and investment; CBN, FIRS; Insufficiently regulated ASM and high informality; Proliferation of illegal miners, including Asian and African illegal immigrants at sites and Construction materials account for the bulk of revenue collection – over 68%” contributed to lower returns for government.

Engr. Sallim Ade Salaam also further listed what should be done namely : “Automation of the Mining Cadaster Office (MCO) systems and decentralisation of the MCO’s activities into six zonal offices; Formalisation of ASM into cooperatives and Development and operationalisation of the ASM Remote Sensing Monitoring System; Upgrade and strengthening of the capabilities of the Nigerian Geological Survey Agency (NGSA); Airborne survey for greater geo-science data; Archiving of geological data; Strengthened Mines Environmental Compliance Dept for effective environmental monitoring and compliance enforcement; and a Review of CDA, EPRP and De-commissioning plan in progress would go a long way to bring the much needed revenue into government coffers.

Of all the identified solutions, the issue affecting the Mining Cadastral Office should attract attention of funding decision makers for several reasons namely the fact that it is the main revenue generation organ within the solid mineral sector. Reports from the sector show that MCA has potential to quadruple her earnings into government cover by more than 60 percent from the status quo. Three things can make this possible namely operationalisng the zonal offices, automation of activities and reach out through marketing communications to global mining investment community.

Strengthening the MCA will concurrently deepen the buoyancy of the presidential gold initiative as it will speed up the formalisation and data capturing of artisanal stakeholders. The mining sector can then attract industrial investors ,taking the solid mineral sector to the level obtainable in many Southern and Eastern Africa nations.

But like noted above ,the agencies and the MDAs must be smart by articulating why they must be funded. Value addition in term of deepening, expanding and boosting revenue generating base is likely to secure more favourable attention.

*Bolade Nafisat writes from Abuja Chamber of Commerce and Industry, Abuja.